While tech stocks rallied today, the commodities, energy and finance stocks tanked. As a result, the Nasdaq index closed the session up 1.3% but the Dow Jones dropped -0.6%. The S&P500, which has a mix of tech, finance and commodities stocks, finished the session flat. It appears that the S&P500 holds the keys to what happens next.
The hourly chart of S&P500 futures shows that there two important levels to watch tomorrow as well as early next week:
- 4222 — this level is now acting as resistance. Note that the same level acted as support before
- 4185 — ES found support at this level twice during the last two sessions. Hence, this is an important support, which needs to hold for the market to continue moving higher. Should the index drop below this level, however, we can expect more selling in the weeks to come.